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Private money and money market integration: the role of payments infrastructure in 19th century Switzerland
Auteur(s)
Rebecca Stuart
Maison d'édition
Neuchâtel : IRENE
Date de parution
2024-09
Nombre de page
44 p.
Collection
Working Paper
Résumé
Using newly collected discount rate data for six Swiss cities, we find no evidence of increasing integration during a 30-year period of lightly regulated free banking. We attribute this to two structural issues: banks had incentives to protect their local monopolies, and the inherent instability of free banking meant that there was always a risk (which varied across banks) of a bank run. We use a novel counterfactual to show that these risks increased discount rate dispersion, and argue that as a result, public regulation of payments infrastructure was necessary for money market integration.
Identifiants
Type de publication
working paper
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